Dalton, 9/16/2021 / 6:00 PM, EST / EDT – EQS Newswire – The Dixie Group
DALTON, GA / ACCESSWIRE / September 16, 2021 / On September 13, 2021, The Dixie Group, Inc. (NASDAQ: DXYN) announced the sale of its AtlasMasland business activity to Mannington Mills, Inc.
Assets sold include inventory, certain pieces of machinery and equipment used exclusively in business activities and related intellectual property. The Company has retained cash deposits from trading activities, all accounts receivable, certain inventory and equipment and facilities at Atmore and Saraland. In addition, the Buyer has assumed substantially all of AtlasMasland’s open orders, and the Company has agreed not to compete with AtlasMasland’s specified business activities and markets for a period of 5 years after September 13. 2021.
The Company received $ 20.5 million in cash at the close of the purchaser and retained cash deposits, accounts receivable and certain inventory and equipment from the business activity with a total value of approximately $ 7 million. dollars. Taking into account retained cash deposits, accounts receivable and inventory, the Company valued the transaction at $ 27.5 million. The Company also retained yarn processing and carpet manufacturing machinery and equipment as well as the Atmore and Saraland facilities, which will be used in the Company’s ongoing residential flooring activities.
Commenting on the sale, President and CEO Daniel K. Frierson said, “As a result of the transaction, the company has effectively exited the commercial market and will now focus exclusively on its residential flooring business.
The funds provided at the closing of the transaction, along with the subsequent monetization of trade receivables and inventory held by the Company, will be used to reduce debt by approximately $ 20 million and significantly increase the availability of borrowing over current levels. some $ 40 million declared at the end. the second quarter of 2021. We believe this continues to strengthen the Company’s balance sheet.
We also believe that the sale of the business activities will have a favorable impact on the Company’s operating results. As shown in the pro forma income statement in File 8-K, profitability for the first half of 2021 is expected to have improved by approximately $ 2.5 million, with direct revenues and expenses related to the business activity being eliminated. This favorable impact will help offset the effect on our financial statements of the increases in the cost of raw materials that we have experienced throughout the year. The loss on disposal is expected to be approximately $ 2 million and will be recorded in discontinued operations in our third quarter statement of operations.
Maintaining certain equipment and facilities should allow us to continue to grow our residential activities and gain market share. We will be able to increase our spinning and tufting capacity to meet the growth we are experiencing and expect to continue to see in the residential market. For the first 11 weeks of the third quarter, our residential sales and orders have increased by more than 25% compared to the same period a year ago. Since the start of the year, our residential activity is up 45% compared to last year, ”concluded Frierson.
This press release contains forward-looking statements. Forward-looking statements are based on estimates, projections, beliefs and assumptions of management and the Company at the time of such statements and are not guarantees of performance. Forward-looking statements are subject to risk factors and uncertainties which could cause actual results to differ materially from those indicated in such forward-looking statements. These factors include the levels of demand for products produced by the Company. Other factors that could affect the Company’s results include, but are not limited to, the availability of raw materials and transportation costs related to oil prices, the cost and availability of capital, integration of acquisitions, the ability to attract, develop and retain qualified personnel and the economic and competitive conditions associated with the Company’s activity. Problems related to the availability and price of energy can adversely affect the Company’s operations. Additional information regarding these factors and other risk factors and uncertainties can be found in the documents filed by the Company with the Securities and Exchange Commission. The Company disclaims any obligation to update or revise forward-looking statements based on the occurrence of future events, the receipt of new information or otherwise.
THE SOURCE: The Dixie Group
09/16/2021 EQS Newswire / EQS Group AG